Question 1

The average U.S. citizens' share of the government debt represents less than 2 percent of a person's lifetime income.

Accepted Answer

A) True 
 B)False

Question 2

Explain how a higher rate of return on saving could, at least in theory, lead to lower saving.

Accepted Answer

A higher rate of return on saving means ...

Question 3

One prominent debate over macroeconomic policy centers on the question of whether monetary and fiscal policy should be used to try to stabilize the economy.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would transfer wealth from old to young?

Accepted Answer

A)  Increases in the budget deficit
B)  Decreased building of highways and bridges
C)  More generous education subsidies
D)  Indexation of Social Security benefits to inflationE) A) and D)
F) A) and C)

Question 5

Suppose that a country has an inflation rate of about 3 percent per year and a real GDP growth rate of about 3 percent per year. How large of a deficit can the government run (as a percentage of GDP) without raising the debt-to-income ratio?

Accepted Answer

The government could run a def...

Question 6

Are there any situations in which running a budget deficit is justified? Explain.

Accepted Answer

The two primary justifications for runni...

Question 7

Social Security transfers wealth from younger generations to older generations.

Accepted Answer

A) True 
 B)False

Question 8

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

Accepted Answer

maximum employment, stable pri...

Question 9

Why might policymakers attempts to stabilize the economy do more harm than good?

Accepted Answer

Policy works with a lag. By th...

Question 10

Many studies indicate changes in monetary policy have most of their effect on aggregate demand about six months after the change is made.

Accepted Answer

A) True 
 B)False

Question 11

Economists predict the business cycle well enough that stabilization policy is likely to work despite lags in the effects of policy.

Accepted Answer

A) True 
 B)False

Question 12

Paul Volcker, former chair of the Fed, implemented

Accepted Answer

A)  contractionary policy, which increased the popularity of the U.S.president who had appointed him.
B)  contractionary policy, which decreased the popularity of the U.S.president who had appointed him.
C)  expansionary policy, which increased the popularity of the U.S.president who had appointed him.
D)  expansionary policy, which decreased the popularity of the U.S.president who had appointed him.E) None of the above
F) B) and C)

Question 13

A reduction in the tax rate on income earned from past saving would

Accepted Answer

A)  most directly benefit the poor in the short run.
B)  increase incomes over time.
C)  decrease the capital stock over time.
D)  decrease productivity over time.E) B) and C)
F) A) and D)

Question 14

Economists agree that if a monetary policy rule is to be used, the best one makes the growth rate of the money supply constant.

Accepted Answer

A) True 
 B)False

Exam 36: Six Debates Over Macroeconomic Policy

Economists predict the business cycle well enough that stabilization policy is likely to work despite lags in the effects of policy.

Correct Answer
verified

Which of the following would transfer wealth from old to young?

Correct Answer
verified

The average U.S. citizens' share of the government debt represents less than 2 percent of a person's lifetime income.

Correct Answer
verified

Why might policymakers attempts to stabilize the economy do more harm than good?

Correct Answer
verified
Policy works with a lag. By th...
View Answer

Social Security transfers wealth from younger generations to older generations.

Correct Answer
verified

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

Correct Answer
verified
maximum employment, stable pri...
View Answer

One prominent debate over macroeconomic policy centers on the question of whether monetary and fiscal policy should be used to try to stabilize the economy.

Correct Answer
verified

Many studies indicate changes in monetary policy have most of their effect on aggregate demand about six months after the change is made.

Correct Answer
verified

Are there any situations in which running a budget deficit is justified? Explain.

Correct Answer
verified
The two primary justifications for runni...
View Answer

Explain how a higher rate of return on saving could, at least in theory, lead to lower saving.

Correct Answer
verified
A higher rate of return on saving means ...
View Answer

A reduction in the tax rate on income earned from past saving would

Correct Answer
verified

Economists agree that if a monetary policy rule is to be used, the best one makes the growth rate of the money supply constant.

Correct Answer
verified

Suppose that a country has an inflation rate of about 3 percent per year and a real GDP growth rate of about 3 percent per year. How large of a deficit can the government run (as a percentage of GDP) without raising the debt-to-income ratio?

Correct Answer
verified
The government could run a def...
View Answer

Paul Volcker, former chair of the Fed, implemented

Correct Answer
verified

Exam 36: Six Debates Over Macroeconomic Policy

Economists predict the business cycle well enough that stabilization policy is likely to work despite lags in the effects of policy.

Correct AnswerverifiedShow Answer

Which of the following would transfer wealth from old to young?

Correct AnswerverifiedShow Answer

The average U.S. citizens' share of the government debt represents less than 2 percent of a person's lifetime income.

Correct AnswerverifiedShow Answer

Why might policymakers attempts to stabilize the economy do more harm than good?

Correct AnswerverifiedPolicy works with a lag. By th...View AnswerShow Answer

Social Security transfers wealth from younger generations to older generations.

Correct AnswerverifiedShow Answer

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

Correct Answerverifiedmaximum employment, stable pri...View AnswerShow Answer

One prominent debate over macroeconomic policy centers on the question of whether monetary and fiscal policy should be used to try to stabilize the economy.

Correct AnswerverifiedShow Answer

Many studies indicate changes in monetary policy have most of their effect on aggregate demand about six months after the change is made.

Correct AnswerverifiedShow Answer

Are there any situations in which running a budget deficit is justified? Explain.

Correct AnswerverifiedThe two primary justifications for runni...View AnswerShow Answer

Explain how a higher rate of return on saving could, at least in theory, lead to lower saving.

Correct AnswerverifiedA higher rate of return on saving means ...View AnswerShow Answer

A reduction in the tax rate on income earned from past saving would

Correct AnswerverifiedShow Answer

Economists agree that if a monetary policy rule is to be used, the best one makes the growth rate of the money supply constant.

Correct AnswerverifiedShow Answer

Suppose that a country has an inflation rate of about 3 percent per year and a real GDP growth rate of about 3 percent per year. How large of a deficit can the government run (as a percentage of GDP) without raising the debt-to-income ratio?

Correct AnswerverifiedThe government could run a def...View AnswerShow Answer

Paul Volcker, former chair of the Fed, implemented

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Policy works with a lag. By th...
View Answer

Correct Answer
verified

Correct Answer
verified
maximum employment, stable pri...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The two primary justifications for runni...
View Answer

Correct Answer
verified
A higher rate of return on saving means ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The government could run a def...
View Answer

Correct Answer
verified